Allegations that more than a billion dollars paid to the Nigerian government ended up with a company controlled by a former Nigerian oil minister have triggered a money-laundering investigation in the UK, according to a report Wednesday from Reuters.
Shell and ENI paid $1.3 billion in 2011 to the Nigerian government for block OPL 245, the report said.
But $1.09 billion went to Malabu Oil and Gas, a company with close ties to former oil minister Dan Etete, Reuters said. The government retained the remainder.
Etete awarded block OPL 245 to Malabu for just $2 million when he was oil minister in 1998.
Zero Corruption Coalition, a Nigeria NGO, complained about the transaction to the UK government, Reuters said.
Etete was convicted in France in 2007 of money laundering for ‘bribes he was alleged to have taken when in government,’ Reuters said.
Malabu Oil and Gas was registered just five days before Etete awarded it block OPL 245, Reuters said.
Transparency campaigners alleged that Shell and ENI used the Nigerian government as a go-between for the payment to Malabu.
‘The proceeds of crime unit is investigating a money-laundering allegation in the UK in connection with OPL 245. The investigation is at an early stage’, a UK spokesman said.
Shell is incorporated in the UK and headquartered in the Netherlands.
ENI, based in Rome, is Italy’s largest industrial company.
Block OPL 245 contains up to 9.23 billion barrels of crude, ‘more than enough to keep China running for two and a half years,’ Reuters said.
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In 2010, a Nigerian subsidiary of Shell was charged with conspiring to violate the Foreign Corrupt Practices Act and aiding and abetting an FCPA violation.
U.S. prosecutors said the Shell subsidiary paid $2 million to subcontractors knowing some or all of the money would be paid as bribes to Nigerian customs officials.
Shell paid $48.1 million to settle the charges.
Also in 2010, ENI and its Dutch subsidiary, Snamprogetti Netherlands B.V., paid $365 million to resolve FCPA-related charges for Snamprogetti’s role in the TSKJ-Nigeria joint venture.
The joint venture paid more than $130 million in bribes to Nigerian officials, U.S. prosecutors said.
The case ranks fifth on our list of the biggest FCPA cases of all time.
Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.